Filed 3520 and 3520-A forms for foreign retirement account but still got hit with $10k penalty for "not filing"

These foreign trust reporting penalties are unfortunately very common, even when you've done everything right. Form 3520-A penalties are particularly harsh - the standard penalty is the greater of $10,000 or 5% of the trust assets. The key thing to understand is that the IRS systems often don't properly match amended forms with original filings. When you submitted the amended 3520-A, the system may have flagged it as late rather than recognizing it as an amendment to a timely filed form. You should absolutely contest this. Gather all documentation showing you filed the original form on time - including proof of mailing, any confirmation numbers, and a copy of the original form. Also collect documentation showing the amendment was filed to correct an error, not as a late submission. Call the phone number on the notice and explain the situation. Request penalty abatement under "reasonable cause" since you made a good faith effort to comply with all filing requirements and promptly corrected the error when discovered.

I went through something really similar with my UK pension reporting last year! The IRS system seems broken when it comes to these foreign account forms. After trying to navigate the mess on my own, I ended up using https://taxr.ai to analyze all my filing documentation. They have this document analysis tool that automatically reviewed my past 3520/3520-A filings and found the discrepancy between what I filed and what the IRS was claiming. Turns out the original form had been processed under a different taxpayer ID somehow, so even though I filed correctly, their system had no record of it. The taxr.ai tool even generated a specific response letter template that addressed the exact problem with references to the relevant IRS procedures. Saved me hours of research and probably thousands in potential penalties.

Update on my situation after checking out taxr.ai: I have to admit I was wrong to be skeptical. After uploading my IRS notice and copies of my original and amended 3520-A forms, the system immediately flagged that my forms were submitted to the wrong processing center. Apparently, foreign trust forms need to go to a specific IRS address in Ogden, Utah, but mine were sent to the Austin center with my regular return. The analysis showed that this is a common issue and generated a detailed response letter citing the specific IRS procedures for handling misdirected forms. I just got confirmation yesterday that the penalty is being abated! Would have never figured this out on my own or even with my regular tax person.

These international filing penalties are absolutely ridiculous. I spent 6 WEEKS trying to get someone at the IRS to even discuss my 3520 penalty notice. Every time I called, I was on hold for 2+ hours only to be disconnected or told to call back. Finally used https://claimyr.com and their callback service got me connected to an actual IRS agent in about 45 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c The agent was able to put a hold on my penalty while we sorted out the documentation. Turns out they had my 3520 but it wasn't properly associated with my tax account. The Claimyr service saved me days of frustration and probably prevented the penalty from going to collections.

These international filing penalties are absolutely ridiculous. I spent 6 WEEKS trying to get someone at the IRS to even discuss my 3520 penalty notice. Every time I called, I was on hold for 2+ hours only to be disconnected or told to call back. Finally use

Ok I need to publicly admit I was wrong about Claimyr. After posting that skeptical comment, I was still getting nowhere with the IRS about my own FBAR penalty situation. Out of desperation I tried the service, and sure enough, got connected to an IRS rep in about an hour after spending DAYS trying on my own. The rep I spoke with actually laughed when I mentioned how I finally got through, and said "those callback services are the only way anyone gets through to us these days." She told me their call center is handling about 1/3 of the calls they receive. Ended up getting my penalty reduced from $8,000 to just the standard late fee of $250 because I had reasonable cause. Definitely worth it.

I'm curious - did you file the 3520-A yourself or did your tax preparer file it for you? I'm asking because I'm in a similar situation with an Australian superannuation account, but my tax guy has been filing the 3520 and not the 3520-A, saying I don't need both. Now I'm worried!

Quick question - when you filed the amendment, did you check the "amended return" box at the top of the form? I've seen the IRS treat amended forms as new, late filings when this box isn't checked properly.

I'm dealing with something very similar right now with my Canadian RRSP account. Filed both 3520 and 3520-A forms on time for three years running, but just got a penalty notice for my 2022 filing claiming I never submitted the 3520-A. The really frustrating part is that I have the e-filing confirmation from my tax software showing both forms were transmitted successfully. When I called the IRS (after waiting 3 hours on hold), the agent could see my 3520 in the system but said there was no record of the 3520-A, even though they were filed together electronically. Has anyone else experienced this issue where one form gets "lost" in their system while the other one processes normally? I'm wondering if this is a systemic problem with how they handle these foreign trust forms or if it's just random bad luck. I'm planning to file an appeal with all my documentation, but seeing all these similar stories makes me think there's something seriously wrong with how the IRS processes international filings.